The video game market should experience its first recession in 2022. Indeed, a British study claims that games will bring in less money this year than in 2021. A drop which is relatively slight, of 1.2%, but which is historical. It also shows that this market is not disconnected from macroeconomic events, the reasons for this decline being closely linked to international events.
Until now, video games could almost be considered a safe haven. This market has always experienced growth, even in troubled times. Thwarting many forecasts in recent years, it has progressed to approaching 2000 billion dollars in turnover over the past two years. $182 billion in 2020including the sale of games . $191 billion in 2021 (+5%). And this in a very difficult economic and health context.
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But, even this market which seemed incompressible should know its first recession in 2022. It is indeed the forecast of the British research firm Ampere Analysis which predicts that the world video game market will reach $188 billion in 2022. If this is confirmed, it will be a historic event, because it is the first time that it will record a decline. But it’s a pullback that feels more like a rebalancing than a real thrill.
Video games have benefited a lot from the health crisis
Indeed, there are several reasons why the market will pull back. And one of them is about COVID. Remember, in 2020, during the first confinement, many households equipped themselves with consoles and PCs. This had the effect of inflating sales figures. An effect that lasted in the year 2021, since households bought games to accompany their new consoles.
Since the health situation is “normalizing”, we are therefore returning to a more balanced pace. Thanks to the histogram opposite, you will see that the years 2020 and 2021 are abnormally high and that 2022 counterbalances. The study also states that the market will rise again from 2023, reaching $195 billion. Pure organic growth.
The video game is sensitive to world events
Other reasons for this decline are mentioned in the study. The war in Ukraine notably. This has two consequences. The inflation that we are experiencing and which leads consumers to rebalance their budgets towards essential needs: food, housing, energy and telecom. Pleasure purchases, such as games, come later. Second consequence, Russia is the 10e global gaming market in terms of size. The various decisions taken against Russia will lead local consumers to buy less gambling.
Another reason for the decline, the shortage of consoles (PS5 in particular) and graphics cards. If these were widely available for purchase, more consumers would be able to buy the games coming out this year. However, the potential is limited by the lack of available units. This significantly impacts AAA titles. Some have been postponed to 2023. Others have been transformed into mobile projects, which do not always bring in as much revenue.
Mobile gaming is also a cause of the decline. In effect, the mobile game market is expected to decline in 2022 by 1.3%, due to new privacy policies from Google and Apple. Advertising is one of the main sources of revenue for smartphone games. However, without personal data, it is impossible to monetize advertising space. This has a considerable effect on the market as a whole, since mobile accounts for almost 60% of the turnover of the global video game market, far ahead of consoles (2e) and PC (3e).
